Mortgage Valuation: Is it really a bad thing if your house is down valued?

Unless you are happy to pay more than a house is worth, it may not be not such a bad thing if your mortgage valuation is less than you had been prepared to pay.

Is your mortgage valuation less than the agreed purchase price?

A number of buyers purchasing a property with a mortgage see the mortgage valuation as a potential hiccup in their purchase.  If a buyer is relying on a mortgage with a large loan to value they may not be able to proceed as planned if the lender’s Valuer provides a valuation lower than the agreed purchase price.   Similarly, some buyers are concerned that the mortgage valuation may lead to a buyer pulling out (or making a lower offer) if they don’t get the mortgage offer they had expected.

If you had your heart set on a particular property and find you are unable to proceed (unless you use some of your own funds) then at minimum this is likely to be a disappointment.  If you have to start and look for another suitable property this may cause a delay, which could possibly lead to problems with the chain and you may even lose your own buyer.

But is it really a bad thing if your mortgage valuation is less than the purchase  price?

If you spend the time finding out why the property has been valued lower than the price you have agreed to pay, you may find there is a good reason.  A Valuer will use details of similar properties which have recently sold or are under offer, in conjunction with their knowledge of the local area, to arrive at the valuation figure.  It is possible that you have made an offer which is too high.  Other factors which may affect value include:

  1. Condition of the property (remember that a valuation is not a survey).
  2. Tenure.
  3. Works carried out without Local Authority approvals.
  4. Planning proposals which may affect the property.
  5. Detrimental use of land/property in the vicinity.

Once you establish the reason for the lender’s valuation being less than your agreed purchase price, you may wish to revise your offer, or even reconsider the purchase.  So, unless you are happy to pay more than a house is worth, perhaps it is not such a bad thing if your mortgage valuation is less than you had been prepared to pay.

buying and selling a house

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DIY in the home

Remember to stick to the jobs which are within your capability and expertise and employ specialists where necessary to ensure works are carried out safely and to the required standard. 

Whether you’ve recently moved house, are preparing to put your house on the market or simply wish to catch up on maintenance or make some improvements, a Bank Holiday weekend gives an extra day to tackle some DIY in the home.  

But take care.  Many accidents in the home or garden could be avoided by taking necessary precautions.

  1. Ensure there is adequate ventilation when using paint, solvents, etc.
  2. Be careful when using ladders or step ladders. Make sure they are in a good condition, used not on a sound surface and have someone to foot when in use.
  3. Wear appropriate safety clothing when using tools such as goggles, mask, dust mask, gloves, footwear, etc, when carrying out DIY in the home.
  4. Take care when using tools.  Read the operating instructions and take note of safety. Only use tools for their intended purpose and which you know how to use safely.
  5. Keep children and pets at a safe distance.
  6. Do not attempt to carry out any works which require specialist knowledge and training such as electrical works, works to gas appliances, installation of wood burning stoves, etc.  Instruct relevant specialists for such work.
  7. Do not carry out any structural alterations without obtaining advice.  Structural alterations are controlled by Building Regulations and in many cases require design by an Engineer.
  8. Do not disturb any materials which may contain asbestos when carrying out DIY in the home.  Asbestos can be found in many materials used in houses built up to 2000, including cement soffit sheets, textured coatings to walls and ceilings, asbestos cement pipes and gutters, some types of insulation, and more.  If there is a possibility that a product contains asbestos then have it tested and obtain advice on it’s removal and disposal from a specialist.  Visit http://www.hse.gov.uk/asbestos/

Remember to stick to the jobs which are within your capability and expertise and employ specialists where necessary to ensure works are carried out safely and to the required standard.

 

 

buying and selling a house

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Buying an old house

When choosing an older house it is important to establish the condition of the property and be aware of any works which are required in the short, medium and long term.

Buying an old house – old versus modern

While some people prefer the benefits of a modern house, others might only ever consider buying an old house.  To some people, the characteristics of an older house can outweigh the disadvantages.  This article has been written with Victorian houses in mind, although some of the points can be applied to houses of other ages.

 

Choosing an old house

When choosing an old house it is important to establish the condition of the property and be aware of any works which are required in the short, medium and long term.  Some properties may require extensive works but this usually has the advantage of allowing the owner to carry out works to their own taste.   On the other hand, it is possible that a property has been maintained and modernised by the present owner, leaving a buyer able to move into their new home and carry out any minor works when time and budget allows.

Whatever condition the property appears to be in, the first step is to arrange a survey.  This will:

  • Help you establish what works are required so that cost estimates can be obtained from contractors. You can then decide whether the works fall within your budget and whether you are prepared to proceed with this particular property with full knowledge of what is required.
  • Help you decide whether to renegotiate the purchase price. However, you must remember that the vendor is under no obligation to reduce the purchase price (and in some cases cannot afford to), and if another potential purchase is ready to proceed then it is possible that you may lose the opportunity to buy the property.

 

Advantages of buying an old house can include:

  1. More character and individuality.
  2. Larger rooms, higher ceilings. Some modern houses, particularly those on high density estates, have small rooms and minimal circulation space.
  3. Interesting features, eg, fireplaces, picture rails, deeper skirtings, plaster cornices, window seats, and exposed beams.
  4. Traditional materials, eg, stone walls, stone floors; slate, clay tiles or thatched roofs rather than concrete tiles.
  5. Original walls and partitions are more likely to be of solid construction rather than modern lightweight partitions and are likely to provide better sound insulation.
  6. Mature gardens.
  7. Useful outbuildings.

 

Disadvantages of buying an old house can include:

  1. Higher heating bills. Solid walls (instead of insulated cavity walls) will allow greater heat loss.  More heat will be needed for larger rooms with high ceilings particularly hall/stair/landing areas.
  2. Draughty windows and doors (unless they have been replaced). Draughty fireplaces.
  3. Lead pipework. Any water supply pipework which is lead should be replaced with modern potable pipework.
  4. Sloping floors and distorted door openings.
  5. Check the cause of any cracking, eg, settlement, expansion and contraction, wall tie corrosion, etc.
  6. If a property is a Listed building then approval will be required to carry out certain works.
  7. Increased maintenance, particularly if windows, doors and joinery at roof level are timber.
  8. Dampness, rot and/or woodworm.
  9. The electrical installation may need upgrading or rewiring may be required.
  10. The heating and hot water system may need upgrading or replacing.
  11. Presence of asbestos containing materials, eg, textured coatings, floor tiles, sheet board materials, rainwater goods, man-made slates.
  12. Mice and/or rats particularly in rural areas. Also, possibility of bats nesting in roofs or outbuildings.

 

See also  How much does a survey cost? and  Is a Mortgage Valuation the Same as a Survey?

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Preparing your house for viewings

There are several simple and inexpensive things you can do yourself to make your house more attractive to a potential buyer.

You’ve decided to sell your house.  You know it will suit some people, but not everyone.  It is simply a matter of time before the right person comes along.  But do you need to prepare your house for viewings?  Is there anything you can do to help persuade a potential purchaser to put in an offer?

The answer is “yes”.  There are several simple and inexpensive things you can do yourself to make your house more attractive to a potential buyer and make any viewings more successful.

  • Clear out junk. Rooms can look amazingly larger with less clutter.
  • Tidy up. Make the house look organised.
  • Get cleaning! Pay particular attention to kitchen and bathroom fittings, and tiles.  No-one wants to move into a dirty house.  You have to make it look as though someone can move in an unpack straight away, rather than having to spend ages cleaning through years of someone else’s grime.
  • Make surfaces sparkle. And don’t forget the windows.
  • If you have pets, make sure there are no odours.
  • Don’t mask odours with air fresheners, fresh air is better.
  • Add plants/flowers, in fact anything to make the place more homely, but don’t overdo it.
  • Get on top of the gardening.
  • Clean paths, patios, etc. Moss and mould can be off putting.  Weeds growing through cracks make the place look as though it has been neglected.
  • Open blinds and pull curtains back to let in as much natural light as possible.

If you plan to do any decorating before putting your house on the market, choose neutral shades which can add light to each room.  Avoid bold colours.  You might like to have one wall purple or turquoise, but this can be off putting to many people.  Most people can live with neutral shades until they get around to decorating to their own taste.  Use the same colour for a number of rooms to create a feeling of continuity and to make your home feel larger.

Above all, keep the place clean and tidy at all times, both inside and out.  You never know when someone might want to come and view your home.

See also Easing the Sale of your House

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